Gold steady as dollar hovers below 2018 peak

Gold prices were steady in early trade on Friday, as the dollar held below its 2018 highs against a basket of currencies after softer-than-expected US inflation data.

Gold prices were steady in early trade on Friday, as the dollar held below its 2018 highs against a basket of currencies after softer-than-expected US inflation data.

FUNDAMENTALS

** Spot gold was steady at USD 1,321.93 per ounce at 0100 GMT, after rising to the highest since end-April at USD 1,322.76 in the previous session.

** US gold futures for June delivery were nearly unchanged at USD 1,322.10 per ounce.

** The dollar index hovered below a four-and-a-half month high of 93.416 hit earlier this week, after US consumer prices rose less than expected in April, prompting traders to pare bets that higher inflation would lead to faster US rate hikes.

** US interest rates futures rose on Thursday even as a smaller-than-expected increase in the US consumer price index in April did not alter traders’ expectations the Federal Reserve will mostly likely raise key borrowing costs in June.

** The Bank of England held interest rates steady on Thursday and said it wanted to be sure the economy was recovering from a slow start to the year before it raised borrowing costs again.

** Interest rates are unlikely to move dramatically in the coming years, European Central Bank Governing Council member Philip Lane said on Thursday.

** Bank of Japan Governor Haruhiko Kuroda said the central bank could debate conditions for exiting from ultra-easy policy if prospects for achieving its inflation target improve, reminding markets his radical stimulus programme won’t last forever.

** US President Donald Trump said on Thursday he had high hopes of “doing something very meaningful” to curtail North Korea’s nuclear ambitions at a summit in Singapore next month, after Pyongyang smoothed the way for talks by freeing three American prisoners.